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Fiscal policy is when the government utilizes spending and / or taxation in order to achieve certain economic goals. For example, by cutting taxes or spending money, the government hopes to stimulate economic activities. By increasing taxes or decreasing spending, it might be trying to slow down economic activity to prevent inflation.
Objectives of Fiscal Policy?
Fiscal policy is the policy concerning the revenue expenditure and debt of the Government for achieving certain objectives like control of inflation, public expenditure etc. Fiscal policy defines as "the conscious attempts of Government to achieve certain macro goals of policy by altering the volume and pattern or its revenue and expenditure and balance between them".
1. Full Employment: the main aim of every Government is to attain full employment level. "Full employment simply means that man power is ready to work at a prevailing wage rate without any dispute.'' In order to achieve full employment level, Government increases public expenditure to raise aggregate demand and tax rate is decreased.
2. Price Stability: - When price rise i.e. inflation in an economy, fiscal policy aims at decrease in demand and aggregate expenditure and tax rate is also raised. Extra purchasing power of people goes into the hands of general public and demand decreases because of excess supply, prices automatically go down because of fear of stocks.
3. Reduction in Economic inequality: - In a democratic country like India the prominent aim of fiscal policy is remove economic inequality. To remove economic inequality progressive direct taxes like income tax, property tax are levied at a higher scale because the burden of such taxes generally falls on rich people. The income generated from these taxes is used for the welfare of the poor masses and to raise their standard of living.
4. Economic Development: - Economic development is an important feature of underdeveloped countries. To achieve development of a country, fiscal policy acts as a source of capital formation because as capital formation is increased, production and employment also increases.
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Fiscal policy and its objectives?
fiscal policy OBJ. in relation to taxation policy and expenditure policy
What is the meaning and objectives of Fiscal policy?
Fiscal policy is how the government taxes and spends money. The objective of fiscal policy is to influence the economic activity of the governmentâ??s country.
How can a government use fiscal policy to achieve its macroeconomic objectives?
It's called communism!!
What is the relationship between fiscal policy and the budget?
Fiscal policy refers to the government's use of taxation and spending to influence the economy, while the budget is a detailed financial plan that outlines these fiscal policies. The budget reflects the government's fiscal policy decisions, detailing projected revenues and expenditures for a specific period. Essentially, fiscal policy guides the creation of the budget, and the budget serves as a tool for implementing fiscal policy objectives. Together, they play a critical role in managing economic activity and achieving policy goals.
Who regulate the Fiscal Policy of India?
The president regulates the fiscal policy of India.
Fiscal policy and its objectives?
fiscal policy OBJ. in relation to taxation policy and expenditure policy
What is the meaning and objectives of Fiscal policy?
Fiscal policy is how the government taxes and spends money. The objective of fiscal policy is to influence the economic activity of the governmentâ??s country.
How can a government use fiscal policy to achieve its macroeconomic objectives?
It's called communism!!
What is the impact of fiscal policy?
Fiscal policy is used by governments to influence the level of aggregate demand in the economy, in an effort to achieve economic objectives of price stability, full employment and economic growth.
What is the relationship between fiscal policy and the budget?
Fiscal policy refers to the government's use of taxation and spending to influence the economy, while the budget is a detailed financial plan that outlines these fiscal policies. The budget reflects the government's fiscal policy decisions, detailing projected revenues and expenditures for a specific period. Essentially, fiscal policy guides the creation of the budget, and the budget serves as a tool for implementing fiscal policy objectives. Together, they play a critical role in managing economic activity and achieving policy goals.
Is protecting homeland security an objective of fiscal policy?
Protecting homeland security is not a direct objective of fiscal policy, which primarily focuses on managing government spending and taxation to influence the economy. However, fiscal policy can support homeland security objectives by allocating resources to defense, emergency services, and infrastructure improvements. By funding these areas, fiscal policy indirectly contributes to national security and public safety. Thus, while not a primary goal, there is a connection between fiscal policy and homeland security efforts.
What is fiscal policy centered on?
Fiscal policy is a policy centered on ideas and research.
Who controls fiscal policy?
The president and congress together control the fiscal policy.
Who regulate the Fiscal Policy of India?
The president regulates the fiscal policy of India.
Is instruments of fiscal policy and tools of fiscal policy the same thing?
Yes these are same................
The economic policy that manages the business cycle by changing government spending is called .?
fiscal policy
How can politics complicate fiscal policy?
Politicians, and the constituents they claim to represent, often have different policy objectives than economic efficiency. That is, while economists often can and have established models for optimal fiscal policies, their end goals differ from those of politicians, so policy is complicated because groups with different desired outcomes must reach a compromise policy.
